Diamond believes that its non-GAAP financial measures provide meaningful information regarding operating results because they do not include amounts that Diamond excludes when monitoring operating results and assessing performance of the business. Diamond believes that its non-GAAP financial measures also facilitate comparison of results for current periods and business outlook for future periods. Diamond's non-GAAP financial measures include adjustments for the following items:
- In the first quarter of fiscal 2013, $7.5 million due to a loss on Oaktree warrant liability, $11.8 million due to SG&A expenses related primarily to audit committee investigation, restatement-related expenses, consulting fees, retention, and severance, and $1.3 million in stock-based compensation, of which, $0.4 million is retention stock-based compensation.
- In the first quarter of fiscal 2012, $17.2 million in costs were incurred due to the proposed acquisition of Pringles, $2.0 million due to SG&A expenses related primarily to the audit committee investigation and walnut labeling settlement, and $1.9 million in stock-based compensation.
- Adjusted EBITDA is used by management as a measure of operating performance. Adjusted EBITDA is defined as net income before interest expense, income taxes, equity compensation, depreciation, amortization, and other non-operating expenses, including the aforementioned acquisition and integration costs. We believe that adjusted EBITDA is useful as an indicator of ongoing operating performance. As a result, some management reports feature adjusted EBITDA, in conjunction with traditional GAAP measures, as part of our overall assessment of company performance.